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Singapore court grants Zipmex three-month creditor protection

·1-min read
Asia cryptocurrency exchange Zipmex was granted more than three months of protection from creditors by Singapore’s High Court.
Singapore court grants Zipmex three-month creditor protection (PHOTO: Dimas Ardian/Bloomberg)

By Suvashree Ghosh and Joanna Ossinger

(Bloomberg) — Asia cryptocurrency exchange Zipmex Pte Ltd was granted more than three months of protection from creditors by Singapore’s High Court, giving the troubled firm breathing room to come up with a funding plan.

Justice Aedit Abdullah gave each of the five Zipmex entities a moratorium until Dec. 2. That will shield the companies from potential creditor lawsuits. The firm operates out of Singapore, Thailand, Indonesia and Australia and was seeking a five-month protection from creditors to form a restructuring plan.

The trading platform ran into a cash crunch after its exposure to crypto lender Babel Finance soured. Zipmex recently allowed partial withdrawals after shutting them down late last month.

Zipmex’s moratorium comes after a decision earlier this month by Justice Abdullah to grant the parent company of Vauld, another crypto firm with local operations, a three-month protection from creditors.

Vauld, a distressed crypto lender, announced in July that it was freezing withdrawals, adding to a series of high-profile crypto collapses. Hodlnaut, another crypto lender with Singapore operations, has also halted withdrawals.

A slew of digital-asset companies worldwide have been hit by a rout in the crypto sector this year that’s only just begun to stabilise.

Crypto lending — where promises of yields above 10% weren’t uncommon — came under strain after the TerraUSD stablecoin collapsed and the Three Arrows Capital hedge fund unraveled.

© 2022 Bloomberg L.P.